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Sunday, 27 September 2020

What we’re tracking on 27 September 2020

Good morning, friends, and welcome to the final week of the third quarter. As much as we’re looking forward to the end of 2020, we’re also cognizant that we’re probably looking at the better part of a year before things start resembling February 2020 more than they do the status quo. It’s US-centric, but Politico’s Here’s how the pandemic finally ends likely holds true (in the main) here in Omm El Donia, too. Consider it your morning must-read.

Meanwhile, the Central Bank of Egypt made a surprise (if modest) rate cut on Thursday, confounding pundits who expected it to leave interest rates on hold. We have chapter and verse in this morning’s Speed Round, below.

We’ll hear later today who’s throwing their hat in the ring for House elections, Youm7 reports. Voters go to the polls in phases starting late this month.

EFG Hermes’ virtual investor conference enters its second week today and is set to wrap this Thursday, 1 October. The conference brings together more than 650 institutional investors with aggregate AUM north of USD 17 tn with top listed companies to chew over the prospects for frontier and emerging markets. You can visit the conference website here.

WATCH THIS SPACE- The government will shop seven “industrial complexes” to potential investors starting next month, Trade and Industry Minister Nevine Gamea said during a virtual meeting of the Egyptian-Lebanese Businessmen’s Association on Thursday.


The CIB PSA World Tour Finals kick off tomorrow at Marakez’s flagship Mall of Arabia, which is hosting the event for the second consecutive year, according to a press release (pdf). The squash championship, which is sponsored by our friends at CIB, runs through Saturday and will see 16 men and women competing for a combined USD 370k prize. Egyptian world no.1 Nouran Gohar and compatriot Nour El Sherbini will go head-to-head in Women’s Group A, while world no.1 Ali Farag and defending champion Karim Abdel Gawad will be representing Egypt in Men’s Group A. The championship will be held outdoors at Mall of Arabia’s the Park, which has been set up to hold 1k spectators. You can get tickets for the event here.

October wll also be big month for squash fans: The CIB Egyptian Squash Open runs 10-17 October, overlooking the Giza Pyramids for the second year in a row.

And in other racket-sport news: Mayar Sherif has become the first Egyptian woman to make it to the main draw of the French Open at Roland Garros after defeating Italian Giulia Gatto-Monticone on Friday.

SIGN OF THE TIMES- Uber subsidiary Careem is moving to a permanent WFH schedule, the company announced in a Linkedin Live session Thursday. The move affects employees at 36 offices worldwide, with the company saying it has seen an uptick in productivity in the past few months. Careem’s current offices will be redesigned as “collaboration hubs” for employees wishing to meet in person. Want to know how other employers in Egypt are adjusting their remote working policies? Check out our WFH survey published last week.

MARKET WATCH- US stocks inched up on Friday but the brief rally wasn’t enough to offset the fourth consecutive weekly decline. Buoyed by a rally in tech stocks, the Nasdaq closed up 2.3% on Friday, while the S&P was up 1.6% by closing bell, and the Dow Jones finished 1.3% in the green.

The FAANG gang looks to be on track for a particularly ugly month: Facebook, Apple, Amazon, Netflix, and Google have lost a collective USD 817 bn of their market value so far in September, putting the group of big tech stocks on track for their sharpest ever monthly decline, says MarketWatch.

Expect more volatility this week with a US jobs report out on Friday, hopes for progress in stimulus talks in Washington, and Tuesday night’s presidential debate meaning that stocks will likely continue to be whipsawed over the coming week, analysts tell CNBC.

The Health Ministry reported 111 new covid-19 infections yesterday, down from 112 the day before. Egypt has now disclosed a total of 102,736 confirmed cases of covid-19. The ministry also reported 16 new deaths, bringing the country’s total death toll to 5,869. We now have a total of 94,374 confirmed cases that have fully recovered.

Umrah pilgrimages from Egypt to Mecca will likely not resume before January, when a covid-19 vaccine is expected to be made available, Chamber of Tourism Companies member Ashraf Shiha told El Hekaya’s Amr Adib last night (watch, runtime: 7:44). Umrah will resume on Sunday, 4 October, with 6k people being allowed to perform the ritual daily. Pilgrims must be Saudis or current residents of the kingdom and will be allowed three hours to perform the ritual in groups of just 1k.

The covid-19 pandemic could claim 2 mn lives by the middle of next year even as vaccines are rolled out worldwide, Dr. Mike Ryan, executive director of the WHO’s health emergencies program, said during a presser on Friday, CNBC reports.

The world has seen more than 32 mn cases, and more than 990k deaths from the disease thus far, according to Johns Hopkins University’s tally.

Remember SPACs? Along with scarce private funding, they’re helping to fuel a US IPO boom: US healthcare and technology companies are in an IPO bonanza that has raised more funding YTD than any year since 2000, except for 2014, the Wall Street Journal reports. Special-purpose acquisition companies (SPACs) — a kind of shell company used to acquire businesses and take them public after securing ‘blank check’ investment — are an increasingly popular alternative to conventional IPOs and are responsible for 40% of new listings in 2020, which has so far seen US companies raise USD 95 bn. Some 235 companies have gone public so far this year, putting 2020 on course to surpass the year 2000 when 439 companies listed during the height of the tech boom. Read: IPO market parties like it’s 1999.

One recent example: A blank check company formed by Vector Capital to target the tech industry, Vector Acquisition, last week raised USD 300 mn by offering 30 mn shares at USD 10, Renaissance Capital says.

US hedgies and activists shareholders could stay in “stealth mode” longer thanks to proposed regulatory changes across the pond that would require only funds with assets of more than USD 3.5 bn to submit quarterly 13F filings, which disclose their public equity holdings, according to the Financial Times. Listed companies are concerned the proposed changes would make activist investors — or investors who purchase a large number of shares with a view to winning a board seat and making changes — a significant threat to smaller companies.

In tech news worth knowing this morning:

  • The next few days could make or break the TikTok sale: Chinese regulators will this week either approve or block TikTok’s Beijing-based parent ByteDance’s agreement with Oracle to separate its US operations, while a US court will today decide whether to allow the Commerce Department to ban new downloads of TikTok.
  • US-China chip wars intensify: The US has sanctioned China’s biggest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), in another move designed to choke the country’s domestic semiconductor industry after last year banning US suppliers from doing business with Huawei, the Financial Times reports.
  • Apple temporarily, partially drops 30% store tax: Apple is waiving the 30% commission it takes on covid-hit businesses looking to pivot to online-only events, after growing vocal opposition to the rules of its store, the Financial Times reports.
  • A step towards zero-emission air transport: A hydrogen fuel-cell plane capable of carrying passengers, ZeroAvia, completed its first flight this week, taking off from Germany’s Stuttgart Airport, CNBC reports.

For our fellow gadget nerds: Amazon has unveiled a drone that will fly around and keep an eye on things inside the house when you’re not home. Daring Fireball’s John Gruber speaks for us when he writes: “I can’t remember the last time when a product announcement filled me with such simultaneous ‘I need that’ glee (flying robots for $250) and ‘no way is that going in my home’ dread.” The Verge has a rundown on the 13 gadgets Amazon announced last week.

Lebanon’s prime minister-designate Mustapha Adib has stepped down a month after being picked for the position, after failing to form a non-partisan cabinet in the country where power is shared between Sunnis, Shia and Christians, Reuters reports.

Palestinian President Mahmoud Abbas called for an international peace conference in early 2021, AFP reports. His call comes as momentum builds in the region for closer ties with Israel following the recent normalization agreements signed by the UAE and Bahrain.


US ELECTION WATCH- Trump nominates conservative to fill Bader Ginsburg’s supreme court seat: Trump lauded Amy Coney Barrett as “one of our nation’s most brilliant and gifted legal minds … a woman of unparalleled achievement, towering intellect, sterling credentials and unyielding loyalty to the Constitution.” A Catholic and conservative jurist, Barrett’s confirmation would tighten the political right’s grip on the US’ highest court for many years to come, the Washington Post suggests. The nomination received wide coverage across US and international news outlets: Bloomberg | New York Times | Wall Street Journal | BBC | CNN | Financial Times |

Reminder: The first presidential debate will be held in Cleveland on Tuesday night.

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